Xi Jinping Presidency: Expect Reform, But Not Of the Political Sort

The path of “reform” will diverge in the foreign and domestic realms: and a discussion of the tension between economic reform and political reform.

In a nail-biter that came down to the close margin 2,952 to 1, with three abstentions, Xi Jinping emerged from the final vote of the National People’s Congress as China’s top leader on Thursday. It’s an “electoral mandate” that any American president would salivate over. Of course, the vote by China’s “rubber stamp” parliament merely confirms the decisions made long ago of party elders in the Central Committee and Politburo.

Nonentheless, Xi’s term begins with high expectations. With some observers calling the last 10 years of the Hu-Wen presidency a “lost decade,” during which mounting corruption, inequality, and environmental concerns went unaddressed, many believe Xi Jinping will be a much more dynamic leader. And there are reasons why they might be correct. Xi has stronger military credentials, is the son of a man who was considered a “liberal” and was even friendly with the Dalai Lama. He has already begun his term with a push to combat corruption in the party.

Reform is the word on everyone’s tongues, the Westerners who like to call themselves China-watchers or China-hands, as well as influential Chinese intellectuals. Hu Shuli, editor of reform-minded news magazine Caixin, writes of the new leaders, “they must not forget the reasons why China chose the path of reform, and why it must now stick to it.” But she is talking mainly about economic reforms: continued opening of the economy, breaking the monopolies of certain state companies, and possible internationalization of the renminbi as a reserve currency.

In China, “liberal” means a continued push toward market-oriented reforms that Deng Xiaoping began in 1979. But the so-called “New Right” of thinkers like Hu Shuli and leaders like new premier Li Keqiang, does not look particularly eager to apply their vigor for economic reform to the political and legal realms.

Most agree that corruption is one of the major sources of popular anger at the party, and Xi was right to begin his term with calls against corruption. But judicial reforms and real checks on local governments’ power to expropriate land are unlikely to be advanced in the near future.

Further complicating things are Xi’s solid military credentials and recent visits to PLA bases encouraging a “battle-ready” force. Xi may be merely strengthening his hand by playing to the PLA, but the military remains a powerful force for shaping foreign policy.

Advocates of increased state-control in the economy, such as disgraced former Chongqing chief Bo Xilai, have been sidelined by the scandal. What this means is that economic liberals now hold an upper hand over the “left,” who advocated a return to certain Maoist values and rhetoric. But for Xi to take on powerful anti-reform interests like state-owned giants in oil and utility industries, he will need the support of other traditional interest-groups, chiefly the military, which also controls many of its own companies.

But a continuance of economic reform and privatization without implementing better social welfare policies (like low-income housing) could exacerbate the public anger towards economic inequality. The curious thing about ideological camps within the Chinese intellectual world is that there are few voices calling for a maintenance of state-led development and investment in welfare AND political reform, at the same time.

Wang Hui, an exile and participant in the ’89 Tiananmen Square protests, wrote last year that, “the protests brought together two separate camps in the square – one led by students who wanted to embrace the political and economic freedoms of the West, and another led by workers who opposed the economic inequality that Western-led market reforms had brought.” Wang Hui believes the recent discrediting of Bo Xilai and his “Chongqing Model” were political moves orchestrated to advance neoliberal reforms at the expense of the left. He believes the failure to address political and social problems will only exacerbate economic inequalities.

And as China’s continuing need for resources and minerals in Africa and around the world lead to a larger role for the Chinese military, Xi’s foreign policy looks to be more outwardly assertive and confident than Hu’s slogan of “China’s peaceful rise.” Xi has recently called for fulfillment of the “China Dream,” a restoration to global power and prestige of earlier centuries. The dominant historical narrative that Chinese students learn in school is that since the Opium Wars of the 1840’s, the West has manipulated and impoverished China through colonialism and unequal treaties. The sense of national destiny and historical injustice will make it less likely for the new leadership to accede to U.S. pressure on a range of issues, especially the South China Sea.

These are the potential contradictions of a vigorous and outward-looking Xi Jinping presidency: That while he may offer hope for economic reform and liberalization, the innate tangle of vested interests that involve the military and state-owned corporations may lead to a more activist foreign policy, perhaps closer to Russia, and more assertive with regard to territorial disputes in East Asia than Hu Jintao’s China ever was.